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Lodge owners consider proposed bed tax

Photo by Rashah McChesney/Peninsula Clarion Sharon Brower, owner of Grouchy Old Woman bed and breakfast, walks through her greenhouse Friday July 18, 2014 in Nikiski, Alaska. Brower said she supports the idea of a bed tax.

Photo by Rashah McChesney/Peninsula Clarion The view from one of the bedrooms in Sharon Brower's Nikiski bed and breakfast Friday July 18, 2014 in Nikiski, Alaska.

Some say it’s time, others say it’s not the way to go.

But it’s up to the Kenai Peninsula Borough Assembly whether the voters will decide this Oct. 7 if a 4 percent accommodation tax should be implemented borough-wide to be used for tourism marketing purposes.

At the 6 p.m. assembly meeting on Tuesday at the George A. Navarre Borough Administration Building, a public hearing will be held on the proposed bed tax ordinance, which, if passed, would put the question to the voters.

Accommodation managers and owners throughout the peninsula have various reasons for or against the proposed tax and thoughts on how it will affect their businesses.

Sharon Brower, owner of Grouchy Old Woman Bed and Breakfast on Daniels Lake in Nikiski, said the proposed 4 percent tax is appropriate.

“I think that a … 4 percent additional sales tax or a bed tax is probably long overdue,” Brower “I would like to see it all go to advertising because it’s a pittance compared to what other portions of the country have.”

At her four-room bed and breakfast, Brower said her 50 percent of her guest are Alaskans, the rest are from out-of-state. She said taxes are just a part of traveling and doesn’t think Outside visitors will complain about the bed tax, if it is implemented.

“I think when they climb on the ship, they pay taxes. When they stop in other parts of the world they pay taxes. That is just part of the expense of traveling is to pay your way in the area you’re traveling through.”

Steven Anderson, who runs the Soldotna Bed and Breakfast Lodge with his wife, thinks tourists pay enough money during their visits.

He said the total 6 percent seasonal sales tax in Soldotna is heavily targeted at tourists.

Anderson was initially a proponent of a bed tax 10 years ago, but has since changed his mind.

But, he thinks tax won’t hurt anybody’s accommodation business; it will actually help because the area needs more tourism marketing.

“To at all compete with our local Alaska competition, there needs to be a lot more (marketing),” Anderson said.

In Ninilchik, Tim Bazinet, of 4-room Drift-In Bed and Breakfast, said he thinks a the proposed tax would have a negative affect on his business.

“Anytime that they’re taking in more money — business as it is with the fishing and everything else going down, no more clamming at Ninilchik anyways — any little thing that we have to do to raise our prices is going to hurt us more.”

With an about two-month long tourist season and a small operation Bazinet said hospitality is a difficult business.

“It’s just not feasible for anybody that’s this small,” Bazinet said. … “The big cities, the big hotels and motels, sure they always normally take a hit in the winter months, but then they make up for it in the summer months with the tourists and they’ve got more people coming in too.”

Bed tax collected in cities would go back to the cities, according to the ordinance. Cities that have a bed tax of the same percentage can opt out of the borough tax. The only city on the peninsula with a bed tax currently in place is Seward. It’s 4 percent bed tax was implemented in 1996.

Mary Bronson, manager of Harborview Inn in Seward said it’s “just not right” that Seward has a bed tax and other areas in the borough don’t.

Bronson said guests who come to Seward from Homer or Kenai ask her why Seward’s taxes are different. So she explains to them that Seward has a 4 percent bed tax along with a 7 percent sales tax.

“If we the customer comes to the hotel (in Seward) and has to pay bed tax, the other parts of the peninsula should also have that or otherwise take the one in Seward (away),” Bronson said.

Jason Young, of Diamond M Ranch Resort, in Kenai said Seward is a proven example of bed tax working with the successful marketing it has been able to fund.

A borough-wide bed tax would also even the playing field for Seward, he said.

A bed tax will boost the peninsula’s overall economy, not just tourism businesses, by bringing in more people and creating jobs, Young said.

“I just see it as a win-win for everybody,” Young said.

He said the implementing a bed tax would take a budgeting burden off of the borough and save it $300,000 instead of giving that amount to a marketing agency annually.

Young said a bed tax is accepted by travelers and doesn’t think a 4 percent tax will discourage people from staying on the peninsula.

“The people that are coming from out of state, they’re cool with it,” Young said. “I mean it’s not that much on top of their stays.”

He said visitors likely wouldn’t accept an overall tourism tax as well as a bed tax. It would also be challenging to decide which businesses qualify as tourism businesses, he said.

However, Mike Warburton, who owns Ocean Shores Motel in Homer, thinks implementing a low tax on customers of all tourism businesses would be a better option than singling out lodging businesses.

“To have us pay for the marketing for all the tourism businesses on the peninsula seems blatantly unfair,” he said.

If the bed tax is implemented, Warburton said it will hurt lodges, hotels, motels and bed and breakfasts, and other businesses too.

“People might stay a day less or it could actually even hurt other folks,” he said. “(Tourists) may buy one less dinner or they may have one more dinner at home.”

If the 4 percent proposed bed tax is voted in, combined with Homer’s sales tax, the total would be 11.5 percent.